USD/JPY remains depressed near mid-105.00s, just above weekly lows

• USD/JPY traded with a mild negative bias for the third consecutive session on Thursday.
• Bears took cues from declining US bond yields, which capped a modest USD rebound.
• Thursday’s better-than-expected US jobless claims did little to provide any impetus.

The USD/JPY pair edged lower during the early North American session and was last seen trading near the lower end of its daily range, just below mid-105.00s.

The pair failed to capitalize on its attempted intraday bounce, instead met with some fresh supply near the 105.70 region and drifted into the bearish territory for the third consecutive session. The pullback was exclusively sponsored by the ongoing slump in the US Treasury bond yields amid doubts over the pace of the US economic recovery.

In fact, the yield on the benchmark 10-year US government bond dropped back closer to an all-time closing low level of 0.501%. This, in turn, kept a lid on a modest US dollar rebound from two-year lows and was seen as a key factor exerting some pressure on the USD/JPY pair, though the downside remains cushioned ahead of the weekly lows set on Wednesday.

On the economic data front, the US Initial Weekly Jobless Claims came in at 1.186 million as compared to 1.415 million expected. The data, however, did little to provide any meaningful impetus to the greenback as investors preferred to wait on the sidelines ahead of Friday’s official US monthly jobs report, popularly known as NFP.

Meanwhile, indications of a mixed opening in the US equity markets extended some support to the Japanese yen’s safe-haven status and further collaborated to the weaker tone surrounding the USD/JPY pair. Bears now await a sustained weakness below the overnight swing low, around the 105.30 region, before positioning for any further depreciating move.

Technical levels to watch